HL Deb 17 March 1993 vol 543 cc1448-90

2.58 p.m.

Baroness Park of Monmouth rose to call attention to developments in the universities, with particular reference to the need to encourage students from low income families to enter higher education, and to recognise the value of postgraduates as a national asset; and to move for Papers.

The noble Baroness said: My Lords, my chief concern in promoting this debate is to draw attention—in a constructive way, I hope—to the needs of students, actual and potential, and to the importance of postgraduates. However, no useful discussion can take place without looking at the relationship between those who deliver education—the universities—and the Government.

The Government have spent over the past 12 years, and continue to spend, very large sums of money on education at all levels. They have recognised the vital importance of higher education. There is much to applaud in that and in the commitment made in terms of resources. But somewhere along the way they have lost touch with the academic establishment. Communications have broken down. The department has created more and more bureaucratic structures; has called for more and more returns; has consulted less and less; and has pulled up the plants regularly to see whether they are growing in the correct way.

This is a critical time for the country in terms of wise use of all our resources—brains as well as money. To succeed in Europe in whatever framework, whether in industry or management of the Community, we will need linguists. And we need good graduates in the humanities as well as in the sciences. We need classicists, historians, graduates in English literature and philosophers. All have the vital understanding of the structure of language (and the classicists, the training in logic) so indispensable for the writing of sophisticated software and to complement the inventive genius of the engineers and scientists who are often less than good at expressing themselves in clear English. As the Follett Report says, it is of paramount importance that the humanities remain part of the mainstream national research effort. To encourage access to postgraduate education must be a major aim.

The next decade, too, will be full of challenge in terms of what our young graduates can do to help to build a new infrastructure in the former Communist countries and to play a vital part in promoting international understanding. The know-how programmes TEMPUS and ERASMUS are all part of that process. Yet this is the moment when the universities are told, without warning after pressure to increase numbers, that in 1993 to 1994 the intake of new students will be cut through fee restraint and that the restriction in numbers should apply chiefly to the classroom-based subjects, notably the arts and social sciences. There is, of course, a critical shortage of scientists, needed as future teachers in the schools, in research, and in that vital area of our economy, industry. But here is an area where early consultation with both the universities and industry—and the partnership between the two has been very fruitful and positive in recent years—might have produced a better solution.

Unheralded stop-go action frustrates any reasonable planning, just as too much bureaucracy imposed from the centre wastes time. Quantifying excellence statistically is not only not feasible; it is counter-productive. Too many of the Government's actions have in the past led to what has been called "a range of uncertainty which could hardly have been greater." It would send a most welcome signal if there could be less centralisation, more genuine consultation and more true subsidiarity.

Another area of potential confusion is the doctrine of the market. Universities, rightly, in my view, precisely because it is a way to some autonomy, have been urged to reduce their dependency on the state, and to go out and maximise the commercial exploitation of their research discoveries. That they have done very successfully: yet the Government insisted on privatising the British Technology Group. The universities were the biggest single source of BTG's intellectual property. They drew £13 million a year in income, which is a valuable incentive to research, and BTG provided the medium and long-term support so critical to the support and exploitation of many major scientific discoveries. Yet the Government did not envisage giving the universities any effective voice in its future or any safeguards. In the commercial world that would be called asset-stripping. Fortunately, there was a management buy-out. But it is another example of the Government's reluctance in the past to consult or to recognise that there are important differences between universities and the market. Each is valuable, but they are different.

Proposals to reduce the length of the degree course seem to take little account of the fact that our degree courses are already shorter than anywhere else in Europe and there is virtually none of the wastage through drop-outs that occurs elsewhere. But market forces appear to be invoked to equate quantity—how many students can be put through the system —with success rather than quality. Probably the most precious, albeit intangible, of assets which universities can give the student is time to think, a scholarly environment and intellectual rigour. Professor R. V. Jones, speaking of the nature of the young physicists who played a vital part in wartime research, said: The main object of a university education is to equip those who graduate from it so that they are able to deal with situations for which there are no direct precendents". Top management in England knows that that is what good graduates can offer. They need quality even before quantity. That is particularly relevant in the light of the DTI study quoted by the Sunday Times, which allegedly attributes, the hole in the heart of British manufacturing to managers who, compared with their overseas counterparts, are only partly educated and ill-trained".

Industry itself, with which I forged close links during my time at Somerville, knows how important the contribution of the universities is. The need for quality has of course to be reconciled with the need to give access to higher education to as many as seek it. That is one of the many areas where policies need to emerge from consultation rather than be imposed from the centre. The process should involve both the universities and industry since I believe that to produce the right conditions to educate the whole population at one stage or another in their lives is enlightened self-interest. We should not look at the question solely as one of the student's own eventual advantage. It makes good sense nationally to subsidise students today if we are to compete in the world of tomorrow and not to waste our biggest asset, people.

In the postgraduate field it is good news that the research councils and the British Academy have taken steps to improve the level of support for those postgraduates holding awards and that the British Academy has introduced the one-year taught course or research training, followed or not by the three-year course. However, there is not more money, just a redistribution of money. That will mean even fewer awards. When such significant numbers—10 to 15 per cent. of full-time students and the majority of part-time students—are privately funded it seems especially hard that they are denied housing and other benefits, as indeed are mature students in full-time education; that they can get virtually no support from the access funds; and that they do not quality for loans, although their undergraduate loan will be steadily growing for another three to four years at least. Government policy for the support and encouragement of postgraduates—and of these the future academics are the seed corn for the universities—is at present both haphazard and incoherent, and yet here lies our future.

Behind the question of how to encourage postgraduates to enter a harsh and often stressful process of learning lies the problem of how to encourage entry into higher education from poor families with no cultural tradition as yet of higher education. Current student poverty and how it is treated is a major factor to consider.

The Government need to take a long hard look, with the institutions, at their policy for students and above all to be seen to listen. There has been mounting evidence of a degree of student poverty for at least three years. In the view of the chairman of the Select Committee on Education, which looked at student hardship in the period from December 1991 to January 1992 and published four volumes of evidence, though sadly no report, demonstrating widespread and fairly severe poverty, there was and is no doubt that real hardship existed and exists for some students. It is those students, perhaps no more than 20 per cent. but still a significant number, whose situation sends signals to the very group of the poor and the children of the blue-collar workers which the Government and universities wish to encourage to enter higher education. They know from students that a full-time student dependent on the grant receives significantly less money than someone of the same age receives in social security if unemployed. They know that they are incurring a long-term debt which, it seems to them, will be ticking away like a time bomb. They know that they will be caught between having to earn a pittance in term time and being unable to find vacation jobs that pay. They know that if they go on to postgraduate work—and if they do not, where will the teachers of the next generation and the strategic thinkers and innovators come from?—the period of poverty, stress and difficulty will be prolonged a further three of four years. Only a handful will qualify for maintenance and none for loans and the job prospects at the end may be far from rosy. That lesson has gone home.

At present, according to a recent and most valuable CVCP survey in January 1993, 64 per cent. of higher education students come from social classes 1 and 2. According to the same survey, drop-out rates have increased significantly, some specifically because of financial problems. Six per cent. of students are in debt to their university to the tune of £485; term-time employment is increasing; and, as pressure on the access funds grows, the sums dispensed have gone down—in Oxford, for instance, to between £50 and £150. It is not merely a question of putting more money into the system—we all know that there is not much of that—but of recognising that some students are in such difficulties that their access to education is in any case being adversely affected, if not wasted, by stress and its effect on the quality of their work. That is a matter of growing concern in the universities.

The access funds are inadequate to meet the true level of need. Pressure on them is growing, fewer applications are successful, and the awards made are too small to be effective. According to ministerial statements, in the past three years the means-tested vacation hardship allowance was worth £50 a week (£500 over 10 weeks of the long vacation) and housing allowance for the 123,000 who are said to have drawn it in 1990 was worth on average £11 a week throughout the year. The access funds produce at most a single payment of between £50 and a very rare £350 and there are no vacation jobs to supplement it. Meanwhile, rents have not gone down. For postgraduates who do not receive loans, who are not eligible for benefits, who are often self-funding and who are precluded by the nature of their course from taking vacation work anyway, the access fund is the only source of help. What they will receive, if successful, is derisory.

I know the Government's commitment to education, and I am encouraged to think that they are ready to consult and to listen. What they need now is vision. I hope that they will, first, review and revise the system of student support in the light of the experience of the past three years, of the evidence emerging from their own current survey of student income and expenditure, and of the considerable body of evidence from the CVCP, the CAB and others, including that given to the Select Committee; secondly, that they will institute a similar review of the situation of postgraduates, who are not included in the department's current survey, and for whom a coherent policy is urgently needed; and, thirdly, as an interim short-term measure, that they will restore the vacation hardship allowance. This, the promised safety net, was withdrawn just when it was needed, three months before the first long vacation in which housing benefit was no longer available and there were no jobs.

Fourthly, I hope that the Government will consider with the universities whether to substitute for the access funds, which are random in their application, which are not targeted and, which, despite the generous provision, produce insignificant sums for the needy, some form of housing benefit, means-tested and targeted, which will enable poor students, including postgraduates, to plan, as they cannot at present do. Fifthly, I ask the Government to consider tax-deductible allowances for the many part-time students, a vital part of the educational explosion, who at present receive neither grants nor loans, and often have to pay their own fees because of the virtual disappearance of discretionary grants. Sixthly, they should consider with the universities and industry other means of encouraging entry for poorer students, such as the possibility of giving capital grants rather than revenue to enable institutions to provide more libraries and study space and thus enable students in many universities to live at home, possibly with a small means-tested housing and travel grant, but still have the proper conditions for academic work. Seventhly, they should consider again the case for the repayment of the loan through a graduate tax.

An effective interface of consultation with the institutions and with industry in the light of recent experience and information could open the way to a different and perhaps better disposition of resources. It would be in the national interest; it would lead to a more strategic and coherent approach; and it would justify the large sums being spent. I am heartened to think, from a recent meeting with the Under-Secretary of State for Further and Higher Education and my noble friend the Minister that this pattern of consultation will now be the norm. I beg to move for Papers.

3.12 p.m.

Lord Morris of Castle Morris

My Lords, Erasmus was a poor bastard, Isaac Newton came from a low-income family near Grantham and Charles Darwin's father was never more than a country GP. So children from low-income families have always been able to get to university and do well there if they are persistent, motivated, hard-working and very clever. We all know that. The present problem is why so few children of the manual working class, which comprises 57 per cent. of the population, enter higher education, where, as the noble Baroness has just said, 64 per cent. of the student population comes from social classes I and II. It is not because those students are apathetic, unmotivated, lazy or thick. It is because they are shrewd.

A university degree is no longer a passport to a good job, and its lifelong financial value is not what it used to be. Potential poor students are also deterred by the fear that they will be too poor to finish their courses; and they note the fact that the drop-out rates at universities have increased significantly. The CVCP believes that any student support system should be adequate, certain, simple and socially just. The present system is none of these. The so-called "access funds", administered by institutions after students have been admitted, are simply hardship funds and should be called that. They must be means tested and they must admit students from low-income families in one way or another. If the Government wish to attract students from low-income families, they have to confess that the present system is a failure; they must do it again; and they must work harder next time.

As we have heard on more than one occasion from the noble Earl, Lord Russell, the academic standards of many university degrees have fallen. This is not the fault of teachers or students, who have never worked harder. It is because students are forced to waste time earning money to pay their bills. Vacation jobs are vanishing, but even if they were not, paid work is not what vacations are for.

Let me illustrate that from my own subject. Your Lordships may agree that any honours graduate in English literature should have read the works of Shakespeare if nothing else. The generally accepted canon is 39 plays. The student will have studied two at school. That leaves 37. He or she must read them in a scholarly edition like the Oxford, the New Cambridge or the New Arden. In the New Arden edition, the longest play is Hamlet, at 591 pages, the shortest is Titus Andronicus, at 172 pages. That would give an average of about 381 pages per play, which, multiplied by 37, gives 14,097 pages to be read.

Assume a steady reading speed of 30 pages per hour, and it takes 469.9 hours to read Shakespeare. Assume again that the student works a 40-hour week (good factory hours), and simply reading Shakespeare, not writing notes about it or essays, or even thinking about it, takes 11.7475 weeks. The summer vacation is about 12 weeks long. And the complete novels of Dickens or of Henry James make the plays of Shakespeare seem like the Reader's Digest.

Of course, not all students read all Shakespeare. You can get away with less, because no examination can be devised which will force you to read it all. But we used to. I did. And the fact that students now have to fight for paid jobs throughout the summer vacation is positive proof that academic standards have fallen, and they have fallen because students have to spend so much time in which they should be reading, working for money.

My point is simple: cutting the student grant, forcing students to take out loans, removing benefit from them, have all lowered academic standards. Students come up knowing less and go down having learnt less than earlier generations. Bachelors' degrees in British universities used to be the best in the world. Not any more. Academic standards are in danger of dropping even further. There is a Latin proverb, optima corrupta pessima—the corruption of the best creates the worst—or, as Shakespeare put it: Lilies that fester smell far worse than weeds".

3.18 p.m.

Baroness Seear

My Lords, I wish in the five minutes allowed to concentrate entirely upon the question of postgraduate students, particularly those who are in full-time taught courses. The expansion of undergraduate numbers is of course greatly to be welcomed, but there is no doubt that it must lead to less rigorous attention being paid to work at undergraduate level than was possible before because the resources needed to deal with the additional numbers are not there. As the noble Lord, Lord Morris, said, the inevitable result of that is that there is a decline in standards of undergraduate work.

That means that the people who are to be the leaders in all fields, not just in academia, but in industry, commerce and politics, will come predominantly from the postgraduate students. It is there that they will receive the rigorous kind of training which, at its best, was possible in the undergraduate courses in olden times but will not be possible now. So the way the Government have treated the postgraduate student in the past is something which they need to rethink as a principle of the policy that they will apply. It was said at one point by a Minister at the time of the Education Reform Act that it was undergraduates who really mattered. Of course they matter, but from the point of view of the country it is the postgraduates who matter. Unless we have good postgraduates, standards in this country will fall dramatically.

We need to raise educational standards in that regard if we are to compete not only in Europe but—and this is much more threatening—in the global economy as a whole. Unless we have really well trained people in industry and education, we shall not be able to compete.

Postgraduates have been the Cinderellas of the education system in recent years. As the noble Baroness, Lady Park, said, they do not receive enough money and they do not receive housing allowance. Often they carry extremely heavy burdens. Sometimes they are married and have families to care for. They need more resources and support. I hope that the noble Baroness is aware that I am making a plea for the postgraduates.

We now need to consider ways in which that can be changed so that postgraduates can spend the limited time that they have in doing the work which is needed, to pick up on what they were not able to do previously in the undergraduate world and to prepare to take on the leadership which we so greatly need. It is wrong to expect them to finance themselves by earning. The money is not there and they need greater resources than have been made available hitherto. If that is not done, we shall lose out because we shall not have the people to take the lead. Other countries have those people. We need to raise the standard of opportunities.

At present in the science field in the taught graduate courses something like 35 per cent. of students are financing themselves privately. In languages and humanities the figure is between 50 per cent. and 55 per cent. Of course, to a large extent that rules out children from poorer families. We are wasting an enormous amount of potential talent which those children have. We need to focus on that group if we are not to rue it in years to come because the leadership in all fields of life will simply not exist.

3.21 p.m.

Lord Annan

My Lords, I have long been an Ishmael among vice-chancellors and colleagues in higher education because I have been less critical of government than they have been in past years. I have always believed passionately in increasing the number of boys and girls who can be educated after the age of 18; indeed, after the age of 16. However, we made a mistake in trying to educate them all at Rolls-Royce standards. It is necessary to have cheaper higher education if we are ever to improve the area which we rarely look at in this House; namely, the further education colleges and individual training programmes that our semi-literate and semi-numerate workforce so badly needs.

Having said that, I must warn the Government. Do they believe that we can expand higher education in the universities and the old polytechnics and not fall into the slough of despond on the Continent? In Germany, few professors ever meet their students. In Rome, 100,000 students occupy buildings designed for 10,000. How are we to ensure that our students continue to be well taught and do not drop out or fail their finals? The drop-out rate is beginning to rise.

British universities were renowned for their low administrative costs partly because the teachers did much of the day-to-day administration and partly because they were not troubled, as they are today, by the Government's concern for accountability. At every university I visit I am told that there is a ceaseless filling in of forms to satisfy the demand to know how many articles or books have been written and on what; how many pupil-contact hours, or, lamentably, simply how many lectures has each staff member given. And because research prowess brings in a higher grant, teaching suffers. At one of London's most prestigious institutions I am told that departments record only lecture hours and ignore time on tutorials. Dons are being gradually turned into salaried employees. They are less and less professional in a profession governed by custom and convention when one accepts duties because it is recognised that they are all part of the profession of being a teacher.

I implore the noble Baroness to use her influence in an endeavour to try not to impose an inspectorate of teaching on the universities. Leave the universities to assess their own teachers. Teaching at that level is a curious art. Professor Harold Laski was a famous teacher at the LSE, beloved by generations of Indian students as well as by the students of this country. Professor Laski believed that you could teach students what is right in politics and what is wrong in politics. He was succeeded by Professor Michael Oakeshott. He believed that practically everything in politics was wrong. However, they were both incomparable teachers. How can that kind of quality in teaching possibly be assessed by number crunching? It cannot be.

However, I approve the Government's evident intention to differentiate between universities by rewarding those departments which are renowned for their research. When the noble Baroness, Lady Park, tells us to recognise that we should not neglect graduate students, she is implicitly asking us to recognise that there are certain great research universities. If we do not make special provision for them, we shall suffer irreparable loss. It is much more important to provide for them than it is to provide for CERN, whatever the physicists may tell us.

Graduate students produce the knowledge that will shape the future. I must put a question to the noble Baroness. How many of her officials at the department know the literature on higher education? How many read the Higher Education Quarterly? How many have heard of Dr. Halsey? How many know that in this country at present is Professor Martin Trow of the University of California, and I am sure that he will be pleased to give a seminar any time that the Minister chooses. Those scholars have something to tell us. I am bound to say that some of the measures which the department imposes upon universities seem to have been thought up by officials who are ignorant of what university life is like. Perhaps the noble Baroness will make them sit an exam paper. I will gladly set it. I believe that she would be surprised at how low the marks achieved by some of the officials would be.

Finally, I ask the Minister to set up a dialogue between the Committee of Vice-Chancellors and Principals and the higher education funding council on ways in which universities can become more efficient. It is no good the department saying, "Further efficiency gains can be achieved". It is no good the universities saying that there is, "Under-funding of the expansion programme". We must have a dialogue for new ideas. Can videos replace lectures? Do not the proliferation of courses and options in fact add to our difficulties? Will the noble Baroness please take that on board?

3.27 p.m.

Baroness Young

My Lords, time allows me to touch on only two points. I shall concentrate my remarks on the first part of the Motion; namely, the need to encourage students from low income families to enter higher education. In doing that I should like to pick up on one of the many interesting and important points made by my noble friend Lady Park. I wish also to ask the Minister two questions.

Undoubtedly there are a number of students, by no means all, who are facing financial hardship at present. Almost by definition, those coming from low income families are more likely to suffer financial difficulties. The new system of loans and the changes in the social security system have coincided with a period of high unemployment. No system of financial help—either the original, full grant system or the system as it is today—was ever expected to cover 52 weeks of the year.

That has clearly made matters more difficult for students, particularly at a time when they are unable to find vacation work. I am afraid that I am not one of those who thinks that doing vacation work is necessarily bad. It teaches you a great deal about life and how to manage your time. We must hope that as the country gradually pulls out of the recession the situation will improve, but in the meantime we are faced with a difficult situation. I agree with my noble friend Lady Park that it is no use simply saying there must be more money. Higher education is already generously funded and I understand that the funds have risen by 4 per cent. in real terms this year so the amount going into higher education has increased considerably.

Nor do I think it likely, although I have not discussed this point with anyone, that the Government will restore the social security benefits, including housing benefit, which were designed for an entirely different purpose. I ask my noble friend to look at the use that is made of these considerable sums of money, in particular the access funds, which I remember were discussed at length when we debated the student loans legislation. It appears that the funds are not being spent in a sensible way. It is difficult to get other than anecdotal evidence on this matter but I believe that that money should be closely targeted to those in need. It may well be that the review by my right honourable friend Mr. Portillo would be the right vehicle for this. It would be helpful if my noble friend would comment on that and on the vast cost of administering the student loans system. That cost appears to fall on universities. I believe that is in a sense unfair and that it causes them difficulties.

Further, many of the problems in higher education are caused by success, not failure. As a country we have been widely criticised that so many of our young people leave school at 16 and do not go into higher education. They are therefore shut off from opportunities and are much less skilled than they need to be in a world that is becoming more competitive and which demands greater skills. The fact is there has been a huge increase in the numbers entering higher education—the figure is up from one-in-eight in 1979 to one-in-four today. Many of those students come from less well off backgrounds.

I shall illustrate that point. I have had the honour recently to be asked to become the Chancellor of the new University of Greenwich. That institution has experienced a great increase in student numbers, as have other former polytechnics which have now become universities. The number of students at Greenwich has increased from 3,800 in 1978 to some 15,000 in 1992. It has been at the forefront in ensuring that people from low income families have access to higher education. It is interesting to note that of the students at Greenwich 35 per cent. are part-time, 60 per cent. are over 21, 15 per cent. come from ethnic minorities and 45 per cent. are female. Greenwich has developed flexible courses and the university has been a leader in a credit-based unit system which enables students to attain a vast range of qualifications while attending either part-time or full-time courses. Students can achieve a qualification that is appropriate to their abilities. There is transfer between full and part-time courses and few leave without a recognised qualification.

I have no figures to show precisely how many fail to complete their courses because of hardship. I understand some 500 students probably leave within the first two months. However, they leave for varied reasons. I have no doubt that financial hardship is one of those reasons. That matter deserves to be considered seriously. I hope my noble friend will look at that point.

I take up what was said by the noble Lord, Lord Annan. We have achieved tremendous success in increasing the numbers of students who attend universities. That is much to be welcomed. However, the future seems to be unclear and a stop-go policy is very unsatisfactory. What everyone would like to know is where the Government see this success going and what should be the next steps in higher education.

3.34 p.m.

Baroness David

My Lords, we all know the commitment of the noble Baroness, Lady Park, to higher education and to students and their well-being. It is typical of her to have tabled this Motion and it is gratifying that so many Peers are speaking in the debate. The fact that this debate is taking place only a month after that tabled by the noble Lord, Lord Addington, on the financial difficulties of students shows how strongly people feel on this subject and how important it is to convince the Government that there are great difficulties in the way of the less well off attempting to gain a university place and, if they gain one, being able to finance their courses for three or more years. Drop-out rates have increased significantly. Over three-quarters of higher education students have parents from non-manual occupations with, as we have heard, 64 per cent. coming from social classes 1 and 2. Are we really advancing towards a classless society?

It is clear that there is a large and as yet untapped pool of young people who could gain from higher education. I understand that the department has commissioned a survey of full-time undergraduate students' income and expenditure during the academic year 1992–93, including the summer vacation. The findings should be available later this year. Will that be in time to affect next year's grants, loans and access funds? Will it include postgraduates' income and expenditure? Their need is as great as that of undergraduates, if not greater. Their importance as a national asset has already been made abundantly clear.

It is important that the review should also look at the income and expenditure of part-time students, both undergraduates and postgraduates. Will the Minister tell us whether that is to happen? I wish to devote my few minutes to those students. They are among the most committed and highly motivated of all. They have lower expenditure in that they live at home. Larger and larger numbers of mature students are entering higher education—I understand they constitute some 50 per cent. of the total—and a great number of them are part-time. Over 80 per cent. of postgraduate students are part-time.

Postgraduates are treated as students by not being given housing benefit and yet they are ineligible for student loans or for many student discounts. Because of the nature of their courses they are unavailable for work in the summer. Part-time students have to pay the cost of their own fees and the cost of books, essential equipment and travel. If they attend the Open University, they will have to attend residential schools and tutorials. Tuition fees there have increased by over 90 per cent. in real terms between 1979 and 1993.

At Birkbeck, where all students are part time, about 12 per cent. have their fees paid by employers. It is often the better paid employees who are helped in that way. There are 4,200 students and the fees range from £500 to £1,000, depending on the course. My noble friend Lady Blackstone, the Master, tells me that by the time they have paid for books and travel—those costs can be high—the costs are likely to reach £900 for undergraduates and £1,390 for postgraduates.

A more highly skilled workforce would be of value to the economy. Many more part-time students are aiming to increase their qualifications with a view to improving their opportunities at work. Surely the Government should look at the possibility of not charging them fees or, if that is not possible, they should at least make loans available to them. If the Government will not even help in that way, will they at least let such students set their fees against tax, as the noble Baroness, Lady Park, suggested?

Where in the past local authorities were often willing to help with discretionary grants, that is now becoming less and less of a possibility with the squeeze on their finances and the threat of capping. Some LEAs have cut out grants altogether or are financing only those students who are in their second and third year. Warwickshire, for instance, is giving no new awards except to students with special needs. Northumberland has said that 1,000 students may miss out on courses this year as a result of reductions in its grant budget. Agricultural college principals have identified nearly 600 students who were unable to take up places last September through lack of grant. Those principals expect the situation to get worse this year.

There are particular anxieties about those undertaking dance and drama courses because they rely on discretionary grants. Is it right that the Government are reviewing discretionary grants in the face of concern over the future of training in dance, drama and the law? In winding up the debate on 17th February the Minister said that the Government can take credit for the system we now have for student support, which is working well. I hope the speeches she hears today will convince her that that is rather a complacent view; that all is not well and that the whole system needs a radical review, including full-time, part-time, undergraduate and postgraduate students.

3.39 p.m.

Baroness Perry of Southwark

My Lords, it is a great pleasure to take part in this debate, which was so ably introduced by my noble friend Lady Park. It was also an enormous pleasure to hear the plea for the quality of university teaching from the noble Lord, Lord Annan, for whose lectures many years ago I used to queue up, together with his many other fans, as an undergraduate at Cambridge. I should also like to offer my apologies to the House for the fact that attendance at another committee of this House may mean that I miss the very end of this excellent and important debate.

I am not here to beg for an increase in the burden on the British taxpayer in general for better funding either for students or universities. It is a fact that the United Kingdom is the second most generous country of all the OECD countries in the support it gives to student maintenance. Almost £1 billion a year is provided for student maintenance support. The problem is that there is now too much strain on the system for it to continue in its present form. I plead for a real change in and a fundamental review of the system of funding both higher education and the students within it.

As we have heard, the present system has many disadvantages. I should like to enumerate two or three of them. First, total dependence on central funding brings with it also a need for central planning. That, incidentally, has led inevitably to a limit on growth, as other noble Lords have said. Expectations have been raised among young people in the past few years, and the Government's great success has been in expanding opportunities. It would be unthinkable now to have to make a U-turn and to say to young people that opportunities will be denied them as they reach the age of entry to higher education. That is exactly what will happen as a result of the limitation on fees for classroom-based subjects. That is a move back to the days of central planning and away from the Government's commitment to a response to the market.

It is undoubtedly true that in responding to the market higher education has been able to fulfil all and more than the Government asked us to do. I believe that it is absolutely right that the market should be left to decide both how many students enter higher education and what subjects they study. An attempt to manipulate the system in particular areas of the curriculum through the fee system is contrary to the basic principle of the market. I appeal to my noble friend the Minister to find a way back to the response to market forces which has proved a success story in the past few years.

Secondly, under the current system of funding there is undoubtedly real student hardship. The debate held in your Lordships' House a month ago produced incontrovertible evidence of the hardship which is now being suffered by students, to a greater extent than previously. That is true of postgraduate as well as undergraduate students.

Furthermore, I am told not only by my own admission tutors at South Bank but by others throughout the country that more and more students are being put off when they come to discuss the possibility of entering higher education. They talk through with the student services and other advisers the funding which is available to them. At the end of the interview they say, "I simply cannot afford it". That is particularly true of students from low-income families who are intimidated by the sums of money involved in student loans which perhaps your Lordships' children and mine would not find particularly worrying. But to a person whose family has always been poor it is unthinkable to take out a loan of several thousand pounds. They will not do it.

For mature students in particular—another group to which we particularly hope to appeal—it is impossible to contemplate raising a family on the amount of grant and loan money which is available to them, even with the increasing tendency for students to work at weekends and in the evenings during their studies.

I ask again for a rethink of the system of funding and a return to the debate on a graduate tax, which has worked so well in Australia. In that country an additional tax of 2 per cent. applies to all graduates, with an option to pay on completion of their course and a 15 per cent. discount if they do so. The system has worked very well and has produced early revenue for the Australian Government.

I should like to see those who benefit from higher education paying both for part of their fees and for their maintenance according to their ability to pay. A loan is imposed as an equal burden on all, whether they are rich or poor after graduation, and whether they are employed or unemployed. A tax system is graduated and may be geared to start only when income has passed an average level. It is geared particularly to ability to pay, whether graduates are unemployed, raising a family, in poor or well-paid employment. I beg my noble friend the Minister to go back and tell her civil servants, if they say that it is too difficult to administer, that they should think again and find a way to make it work.

3.46 p.m.

Lord Walton of Detchant

My Lords, like the noble Baroness, Lady Perry, I also apologise to the House. I have an unavoidable commitment later this afternoon which prevents my staying until the end of the debate. However, I look forward to reading the closing speeches in Hansard.

There have been a number of important and encouraging developments of late in our universities. First, it is good to note that the number of students entering higher education has increased substantially despite the Government's recent unfortunate stop-go policy, although we still lag behind many of our international competitors. Secondly, the abolition of the binary line has made available a much wider range of courses in topics not always covered by the older institutions. Thirdly, there has been a significant increase in the number of students admitted to universities from comprehensive schools. Fourthly, admission criteria have been modified so that more mature students are entering higher education. Fifthly, the universities themselves have developed major initiatives in fund-raising to support important developments. Many, too, have developed increasingly fruitful links and even partnerships with industry in teaching companies, for example, so as to correct a major deficiency which has long plagued this country, namely our comparative inability to capitalise on inventions created by British genius.

Despite those encouraging changes we still have a long way to go. There are at least three good reasons why too few students from lower income families enter higher education. First, the rigid entry criteria, based upon achievement in A-level exams, have always been a deterrent in some areas. This country has a tradition of serving well bright young people of exceptional ability whatever their family background and social income. The A-levels are admirable for those in the top 15 per cent. in intellect and ability. However, there are many talented youngsters in the next 25 per cent. who do not achieve adequate results in those exams. Hence they feel that they have failed, and that the system has failed them. And that has put them off higher education.

Happily, the position is changing. Some universities are offering not just standardised degree courses but a wider range of qualifications following on from BTEC, HND, NVQ and the admirable new GNVQ. The whole structure of qualifications on offer at 18-plus needs careful re-examination. We must modify a system which persuades too many young people that they are failures. That and many other social factors have led in certain communities to a powerful anti-education ethos ("Universities are not for the likes of us") which we must do everything in our power to correct. The availability of a wide range of university qualifications, combined with a better public perception of the fundamental importance of a skill-based society, should get that message across.

The third problem is of course, financial. While I have every sympathy with those students who firmly believe that education and maintenance at all levels should be fully funded by the public purse I accept that in the funding which the Government contribute to student maintenance we are still one of the most generous nations in the western world. Publicly funded fees will, I hope, be preserved and indeed extended to courses for which they are not now available. But it is, I believe, unrealistic to expect a reversion to a much more generous system of maintenance grants. I am not opposed in principle to student loans but I believe that there is clear evidence, as other noble Lords have said, to indicate that the present scheme is complex, ineffective and often benefits least those most in need.

The access funds have also proved quite inadequate. Medical students, in particular, have been hard hit by reduction in maintenance grants and the withdrawal of benefits as in their clinical years they work throughout the year. Restoration of housing benefit would cost relatively little and would make a huge difference. But I too would much prefer the loan system to include repayment over a prolonged period through a graduate tax. I trust that the Government will reconsider that possibility.

Perhaps I may mention the crucial importance to this country's medical, scientific, cultural and industrial future of postgraduate awards leading to higher degrees. In medicine, today's basic science discovery brings tomorrow's practical discovery in patient care. A similar principle undoubtedly applies to science and engineering where we have failed all too often to capitalise on scientific discoveries. Britain has a proud record of achievement in medical research and some young doctors regularly explore the possibility of undertaking full time postgraduate study in molecular biology in order to use that knowledge in research leading to the conquest of disease. However, if they have accumulated major and substantial loans in their undergraduate career, they are deterred from pursuing the career that they would wish.

Finally, the Department for Education in its steering group with the Department of Health must also continue carefully to examine the increasingly precarious position of clinical research and clinical academic medicine with its falling recruitment which gives rise to serious concern.

4.51 p.m.

Lord Beloff

My Lords, 25 years ago this country had a system of higher education which was the admiration of the world. Among other things it provided for a higher proportion of children of working class families than was common in most universities in Europe. That system has been destroyed to the extent to which there is now almost universal depression in the universities, as the noble Lord, Lord Annan, and others have pointed out. Why is that so? How has it been destroyed? It has been destroyed by an abrogation of the partnership which existed for many years between the government of the day and the university community which was symbolised by the old University Grants Committee. The system was held up to other countries as a model of the way in which finance could be channelled into higher education without government control. That partnership has been abrogated.

The funding councils are simply instruments of government, dominated by the extraordinary view, prevalent in Whitehall, that the last people to know about a function are those who actually practise it and that there must therefore be a lay element; if possible, lay domination.

What is the most recent example? It has been slipped in without much publicity that the new chairman of the Universities Funding Council is to be an eminent accountant, from a well known firm, whose CV suggests no intimate acquaintance whatever with any aspect of universities. I have ascertained that that appointment was made without any consultation with the Committee of Vice-Chancellors and Principals. The committee might at least have been asked whether it would like to comment on the choice of someone in whose hands the future of its institutions to some extent will lie.

When I was a small boy in London on boat race day, I was asked, "Are you Oxford or Cambridge?" My great grandson will be asked, "Are you Coopers or Lybrand?" That is what we have come to. That unwillingness to consult and the belief in the infallibility of a group of civil servants who themselves would have made little impact if they had stayed in the university world, with the arrogance and ignorance that it produces, explain the problems which from different points of view other noble Lords have explored with us.

For instance, many of the issues which have been discussed today, and no doubt will be discussed later, have been pointed out in debates in your Lordships' House over the past few years. When the student loan scheme—the Jackson loan scheme—was launched, I, and other noble Lords repeatedly told your Lordships' House that the scheme would not work, that it was extremely expensive and that it would put students off. I remember the eloquence of the noble Lord, Lord Boyd-Carpenter, on that subject. Noble Lords stated then, as the noble Baroness, Lady Perry, said today, that if it is perfectly reasonable that people should pay in the end for advantages which they have acquired through higher education, the only simple method was a graduate tax along the Australian model. The Government took not the slightest notice of the fact that they were told that not just by Members of your Lordships' House but by Members of your Lordships' House with much experience in the world and in universities. We have pointed out—it has been elaborated today—that postgraduate study is important.

One factor that noble Lords have not pointed out —I conclude by emphasising it—is that because British students cannot afford to take up many postgraduate courses of the greatest distinction, they are being taken up by foreigners. We are doing a lot of admirable postgraduate training for other countries and, internationally minded as we are, no doubt we should be pleased. However, when a major course such as one with which I am familiar in a Scottish university—it trains people to deal with matters such as terrorism, drug traffic and other scourges of the modern world—is attended entirely by foreign students, we are in an idiotic situation. Although the students pay their fees, the money at capital level which goes into that course comes from the British taxpayer. I could multiply that example.

The noble Lord, Lord Annan, talked of the bumf which now drowns the desks of people who ought to be teaching. Why? Because the questionnaires are not designed by people who understand universities but by another lot of accountants. No doubt they are the younger brethren in Coopers & Lybrand. Therefore, I must appeal to the Minister to take back from this House the view that I believe she will find is echoed in future speeches. Since things have gone so badly wrong —we have an unfunded expansion whose purpose is not clearly understood either by the students or the universities—surely the Government might for once take a little advice from people who know what they talk about.

3.58 p.m.

Lord Rea

My Lords, it is a privilege to follow the powerful and cutting speech of the noble Lord, Lord Beloff, with whose views I completely concur. In my five-minute allocation I shall focus on undergraduate medical students, although some of what I say will apply to other students, especially those with a long and arduous course.

It is customary to regard doctors as ladies or gentlemen, often bountiful, with a high social status, whether or not that is deserved. Therefore, it is not surprising that a particularly high proportion of entrants to medical school comes from professional or managerial families. Until recently that proportion had been slowly decreasing, with the proportion of women increasing. That has now stabilised at about 50 per cent. Both those trends are to be welcomed. Some of the reasons have been put by the noble Baroness, Lady Park, who is to be congratulated on choosing this topic, especially when one considers the Bench from which she speaks. By opening up universities to the whole social spectrum, as the noble Baroness, Lady Seear, said more eloquently than I can, we tap reserves of talent and intelligence which would not otherwise be fully harnessed.

I am a product of Cambridge. In my day it was quite a difficult fortress for the less privileged to enter, and still seems to be, despite protestations to the contrary. It was my experience that if they could survive the peculiar establishment customs of that place, working-class undergraduates showed themselves to be of superior ability. They had to be to overcome the hurdles on the way and those that they encountered afterwards.

However, medicine needs not only recruits of high intelligence. It also has a particular need of people from all social classes and all ethnic groups. It is becoming clearer and clearer that nearly every ill is more common and more severe the more disadvantaged the origins and lifestyle of the citizen concerned. To change an unhealthy lifestyle is difficult; many influences operate. Very often there are sets of cultural norms which are powerful and difficult for people to discard: smoking, dietary and drinking habits are prime examples. To be told to change one's ingrained habits by someone from a different cultural background and of a different social class is likely to result in rejection of the advice. Someone who has had the same experience as the patient or client is more likely to understand the pressures operating on them and as a result the whole range of medical and health education advice is more likely to be appropriate and effective.

However, what in fact is happening? According to the 1991–92 BMA survey of medical students' finances, whereas the proportion of medical students from professional or managerial families fell from 76 per cent. to 74 per cent. between 1988 and 1990, it rose again to 78 per cent. in 1991–92. The former and more democratic trend seems to have been reversed. It is not difficult to see why. The average income of medical students, including the top-up loan, in 1991–92 was £2,845 (£3,505 in London), whereas the average expenditure was £4,420 (£5,304 in London). The result, as Mr. Micawber would have predicted, is misery: an average deficit of £1,575 (£1,799 in London).

Because of the intensity of the course, as my noble friend Lord Walton pointed out, there is little time for students to earn money to supplement their income. Some do, of course, but to the detriment of their health through lack of sleep and of their chances of doing well in their finals, as was pointed out by my noble friend Lord Morris. Of course, the lack of sleep could be regarded as a form of training for their first few years of professional life as junior hospital doctors.

So it is not surprising that 71 per cent. of medical students are in debt, with an average debt of £2,400. As that figure is an average, many have much higher debts which increase as the course goes on and the chances of getting a part-time job recede. Those students from low income families have greater debts than those from more privileged backgrounds.

It is often argued that medical students should not complain; they are assured of a well-paid job on qualifying. However, I assure noble Lords that medical salaries are not high to start with. It is only by being on call for excessively long hours that debts can be repaid and mortgages even considered at an age in the late 20s when many in other walks of life have started to raise families. The result of high debts has been to drive students—this has been shown particularly in the United States—into highly paid and perhaps undesirable branches of medicine, to the detriment of research, as my noble friend Lord Walton pointed out, public health and primary care, which are relatively poorly paid, but which may be of more importance for the health of the community.

I wish to conclude by quoting the final paragraph of the BMA survey: It is becoming increasingly difficult for any student to afford to undertake a minimum of five years of medical study unless he or she has substantial personal resources. This situation will inevitably lead to medical entrants being admitted on the criterion of ability to pay rather than academic ability and will eventually manifest itself in the quality of the medical profession in years to come".

4.4 p.m.

Lord Boyd-Carpenter

My Lords, as my noble friend Lord Beloff has just reminded us, three years ago your Lordships' House was discussing the Education (Student Loans) Bill. I faced the daring expedient of turning up my own speeches on that Bill and for once in my life found that I had nothing whatever to regret in them. I ventured then, as I repeat now, to say that I think that the introduction of student loans and the elimination of the many social benefits which went with them was a great mistake and is responsible for many of our current difficulties.

The difficulties are considerable, and it is impossible in the course of a five-minute speech to do more than list them quickly. First, as has already been mentioned, there is the great discouragement to a young man or woman to go to university, knowing that he or she will emerge from it a substantial debtor. Many people are brought up—I think rightly—to regard getting into debt as a dangerous and harmful process. The idea that automatically every graduate should be a debtor seems to me a most deplorable one: it is responsible for the discouragement of a good many young people going to university at all. It is also an illusion to believe that one is relieving public funds of undue pressure by that expedient. Loans paid out now may be thought to amount approximately to what the grants would be; therefore, the amount of expenditure which the economy has to bear at the moment is the same under either the grant or the loan system. All that we get from the loan is the chance—and in many cases it is not much more than a chance—of recovering some of the money years hence.

In the light of the Budget, how can anyone be sure—and we are talking of five, six or seven years ahead—that the amount recovered will be of any importance at all? If the Budget is right, then the expenditure which we are talking about will be quite harmless. One has to face the fact—and I beg the Minister to face it—that by substituting a loan for the grant we are not relieving current expenditure at all. What we are doing is giving to graduates the considerable incentive to go abroad. If, after graduating and having drawn the loan, they go abroad, so far as I know there is no means whatever of recovering the loan. We are giving quite a considerable incentive to just those people whom we most need in our country—the highly trained university graduates—to go to work in other countries. That surely must be harmful.

I regard the student loan scheme with even more distaste now than at the time I spoke against it—at some length, I am sorry to say—three years ago. I believe that it is extremely harmful and that we should reconsider it urgently. Most noble Lords will acquit me of being an advocate of increasing public expenditure. I have sometimes made myself exceedingly unpopular by advocating the reverse. But the grant would not have the consequence for years to come of increasing public expenditure: it would simply mean going back to a time-honoured system which worked perfectly satisfactorily. It would also free us from the criticism that every graduate will be a debtor when he leaves.

I wish to recall what I quoted three years ago: it remains true: Neither a borrower nor a lender be; For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry".

4.9 p.m.

Lord Addington

My Lords, the subject of the debate today is the extension of the debate which started a month ago with a Motion in my name. The noble Baroness, Lady Park, has developed the point, leading us to other issues which were not covered by my debate and she has done so with tremendous skill. I shall try to concentrate on the issue of encouraging people from a non-traditional element of society to go into higher education.

The last time I spoke, basically I challenged the Government over one fact: that the new system of student maintenance does not provide the same level of income, if the student cannot find a job. We have heard much about what can happen if the student does not obtain a job for a few hours per week but works nearly a full week, as opposed to serving behind a bar. Students are effectively being crucified if they work every night of the week. If we do not provide them with an adequate income and they do not work, they will have less income than someone on social security. I raise again a point I made previously. It has been questioned whether one can eat properly on social security. We are asking people from the income group who know most about what it is like to survive on the bare minimum to go into higher education and encounter more debt.

A great wave of graduates were told to go into the City and join the "yuppie" boom. What happened to them? Many are now unemployed. It was a classic example of how things can go wrong even for people with a higher education. We still need those people, but they perhaps need to be trained in different ways. We must reassess what our country does and how we produce our wealth. We must try to encourage people to go forward. But we present them with a system of personal funding which means that they may not have enough to live on. That is a huge disincentive.

Let us consider the incentives that are relevant to a person of 18 or 19. In the years that have passed since I was thinking of going into higher education—not that long ago —there have been radical changes. I was told that it was supposed to be fun to go to university. Now it is not. One cannot have a good time when one is always hungry; when one cannot pay one's rent. There is no incentive to be there. I am afraid that the image of a drunken student is rapidly diminishing. Anyone who has worked inside a student bar or been part of a student community will know that the element of camaraderie has gone. That is something we should bear in mind.

We are asking young people from the nontraditional groups to go into something which they have never before experienced; something about which their parents haute little knowledge. It is new and strange. We are asking them to take on debts and risk not being able to pay them back. If we seriously tried, could we create a more unpleasant image for them? We are asking them to take a chance on something that their friends are not doing and do something which could go horribly wrong.

I shall not go into other points about which I am concerned. I wish, however, to counter one argument that is often used —that the self-sacrifice is worth it. I attended Aberdeen University. There is the wonderful tradition of the young, hardworking person from a poor background who goes to college and works his way through on the bare minimum for pure love of study. He is called "the lad of parts". He appears out of the middle of nowhere with a sack of oatmeal over one shoulder and potatoes over the other. He lives off that and gets wonderful grades. Yet in all those stories he invariably dies of consumption on receiving his degree. I suggest that it is not a good model to be striving for.

4.13 p.m.

Lord Chilver

My Lords, I turn from the issue of funding problems facing students from low income families to a somewhat different angle. I want to comment on some of the ways in which access to universities for students has been improved over the years.

In the 1950s and 1960s university entry in Britain was characterised by a low proportion of students from lower socio-economic groups. Progress towards a wider spectrum of recruitment of students was extremely slow. Indeed, as recently as the mid-1980s the chances of a young person from a low income family going to university was as low as one-fifth of those of a young person from a high income family. That is 30 years after the end of the Second World War. It was a period in which universities were heavily dominated by state funding, which clearly did not produce a wide index of students in universities.

Over the years a number of measures have helped to improve the situation, including courses for part-time students and more courses for mature students. Both enable students from low income families to pursue their studies in less conventional ways. But those and similar steps have tended only to have a marginal impact on access at the extreme end of the social spectrum. In my view, it is unlikely that they will ameliorate the situation on a scale which widens the social spread of students in Britain in line with other advanced countries. For example, in Germany the proportion of students in higher education from the lowest socio-economic group is around three times greater than in Britain.

One of the roots of the problem in Britain is that young people in school are not uniformly aware of the diverse opportunities which higher education in this country now offers. Again, as has already been mentioned, young people at school are not uniformly prepared for university entry. There is a natural tendency, on the other hand, for universities to select against well-defined examination standards, as has been noted in the debate. It is not an easy matter to make allowances for students who are not well prepared at school for university. It is important that for young people disadvantaged in that way there should be a readiness on the part of universities to adapt their selection methods to widen the social entry of their students.

Universities in Britain are among the most independent in Europe. It would not be unreasonable to ask them to explore ways in which they can genuinely widen the range of initial recruitment without damaging the quality of their work. There is an expansion of higher education in Britain which shows no signs of any deleterious effects on the quality of academic work or on the standards achieved. Ways must be found to show young people from low income families the importance and relevance of higher education in their careers. On the other hand, ways must be found by universities of overcoming limitations that formal entry qualifications may always imply.

Wider discussions within the university sector—I include students as well as staff—could help our independent universities to see that they have a vital role to play in tackling one of the most important and, indeed, longest-standing problems of higher education in Britain. At the same time, I hope that the Government and the higher education funding councils will do everything in their power to encourage that wide discussion so that we can look for new solutions within that important sector of higher education.

4.18 p.m.

Baroness Lockwood

My Lords, I congratulate the universities on the way that they have faced and adapted to the tremendous changes that have taken place over the past decade. It has not been an easy period for them; it has been one of "stop-go" and continual change. First, we saw the 1981 cuts and the capping of student numbers followed by expansion. There were changes in the structures under the funding arrangements. In the past three years universities have been encouraged to prepare for rapid growth throughout the whole of the 1990s. Now the Government have called for a period of consolidation and an ending of that growth.

There have been a number of consequences. First, the unit of resource has been continually eroded. Secondly, staff conditions and salaries in real terms have suffered, in particular in relation to other professions. Thirdly, the fabric and maintenance of buildings and plant have deteriorated, presenting a tremendous financial burden to institutions. Fourthly, student support has decreased, leaving many students in poverty and highly in debt.

On the more positive side, institutions have become more flexible, seeking alternative sources of income, in particular through programmes of continuing education, overseas recruitment and links with industry. There have been programmes to encourage part-time and mature students and access links—all of which have been a testimony to the initiative of the institutions despite the financial constraints under which they were working.

The latest and damaging changes of direction are particular acute. After being encouraged and rewarded for increasing student numbers, institutions are now being told that their expansion plans must be dropped. This could actually mean a reduction in student recruitment over the next three years; otherwise the number of students already in the system, with its knock-on effect, will produce a student population above the level now acceptable to the Government. Those institutions which go beyond their target numbers will find themselves financially penalised—an exact reversal of the situation over the past two years.

If we add to this the 30 per cent. reduction in tuition fee levels for arts and social science students, we find that many institutions are in real financial difficulty. Particularly at risk are those institutions which have embarked on an improved programme for student accommodation and teaching facilities in order to accommodate the increasing numbers that they were planning for.

This is a chaotic situation in which to find ourselves at the turn of the century, when we know that our world competitiveness will depend on the education and skill levels of our population. The tragedy, as many noble Lords have indicated, is that the group most likely to suffer is that which has benefited least from the expansion of higher education. Despite the increased participation rate, there has been little growth in the participation rate from the social classes C2 and C3. We need a policy to raise the expectation of those groups, who still do not envisage a system where a university education is the norm for their children.

A reform of the A-level system, as advocated by many in the education world, together with the introduction of a system similar to the one recently put forward by the CBI, with its proposed grant for the 16 to 19 year-olds, would do much to boost the confidence of those groups and would put them into a situation from which students of higher education are recruited. As it is, the present consolidation, or retrenchment, is likely to deter because the children from those groups, more than others, are likely to be non-standard, or at the margin, and therefore excluded in the present climate.

4.24 p.m.

Baroness Platt of Writtle

My Lords, it is difficult to know where to begin with developments in the universities, especially in five minutes. A hundred years ago Oxford and Cambridge had not admitted women as members. Now, nationally, women form nearly 50 per cent. of the student body: that is a dramatic development. As yet, however, only 3 per cent. of professors and 19 per cent. of principal lecturers are women. There is room for considerable development of flexible working arrangements in the universities so that women can combine a happy and responsible family life with a successful career, achieving promotion to the highest level of which they are capable.

My noble friend Lady Park is herself an example of ability well rewarded and my noble friend Lady Perry is the first woman Vice-Chancellor of one of our universities. Progress has happened but it needs to be continued. Opportunities have opened up for our young people since the CATS, and later the polytechnics, have become universities, with their tremendous growth in student numbers and places available, which are being taken up. That is not before time. In these days of the universal application of new technology, we need above all a knowledge-based workforce capable of independent study and continuing professional development wherever they find that their working lives demand new skills and knowledge. I am glad to say that not only the former polytechnics but also the older universities are now alert to this new need, whether it be at postgraduate level, or as a module which through credit accumulation may add up to a first degree. The courses may be short full-time but are far more likely to be part-time, perhaps day, but more often evening or even weekend or distance learning, so that the students can hold on to precious jobs while learning new skills leading to greater job efficiency.

Often, the new students are the first generation from their families to experience higher education. They come from low income families, as my noble friend emphasised. It is a double struggle as they cope with demands which are both academic and financial. My noble friend dealt with the matter comprehensively and in depth, so I shall not continue with that part of my speech.

The rising number of students over the remainder of this century are increasingly likely to be of a more mature age, especially with the number of 18 year-olds falling off dramatically. Some may study through the necessity of acquiring new knowledge in their jobs but some will also study for a degree either full-time or part-time or through distance learning having been made redundant or after bringing up a family with the hope that the new qualifications will prepare them for better-paid employment later when skills are short.

Those people probably left school with no thought that they might one day acquire a degree: they might indeed have been conscious of academic failure. Today, with access courses and accreditation of prior learning and experience, they may be admitted to the first stages of higher education. In particular, the new universities are forming valuable links with satellite colleges of non-advanced further education. Students may enter there, near home, for BTEC higher certificate or diplomas or City and Guilds qualifications and prove through high motivation that they are capable of far more success than either they themselves or their tutors expected. Through common teaching syllabi, they may then be transferred to a degree course and achieve good results.

Often, this progress is achieved by reliance on part-time study or distance learning to fit in with employment or family responsibilities. If students are employed, employers will often help with fees because they will also reap the reward of a better-qualified employee. For the woman at home preparing to return to work better qualified, there is no such help. Part-time grants, being of a discretionary nature and given by the LEA, are bard to come by. Yesterday's Budget Statement promised help for the long-term unemployed to acquire qualifications on full-time courses, but I look forward to the day when grants are related to qualifications, irrespective of mode of study. The Treasury might actually benefit, because part-time students normally live at home and therefore do not require a residential element in their grant. The development and support of part-time learning is important: I am very much in favour of that sort of flexibility. Part-time, like full-time, students form valuable national human resources —definitely vital national assets.

The courses offered by colleges today are more industry and commerce based, with industrialists willing to give voluntary time to serving on advisory committees and faculties and to monitor and advise on relevance. Colleges are forming far stronger links with local commerce and industry, perhaps through TECs, so that their diplomates and graduates will achieve subsequent success in the local employment market. These new-type diplomates and graduates will, I believe, most definitely be a national asset. I thank my noble friend Lady Park wholeheartedly for initiating this valuable debate.

4.29 p.m.

Lord Rix

My Lords, I am delighted that the question of discretionary grants for dance and drama students has already been touched upon by the noble Baroness, Lady David, for that gives me a little more time to say a word about learning disability and the universities: specifically about degree courses for those working with people with learning disabilities, and becoming the service leaders of the future.

For more than 20 years, Mencap has played a key part in keeping alive the torch of advanced education for staff working with people with learning disabilities. I hope that this history will be written before we lose it, as a tribute to the work of Professor Clarke, Professor Mittler, Ed Wheelan, Mencap's own James Cummings, and others. During those 20 years, we moved from junior training centres to special schools and on to a greater degree of integration in ordinary schools. Over the same period, hospitals declined and community homes developed; and adult training centres became social education centres and then resource centres.

Diplomas waxed and waned; and new degree courses developed. Throughout that time, it was a constant battle to ensure that staff needing advanced courses to acquire special understanding and special skills got what they needed. It still is a battle. We do not value people with learning disabilities sufficiently to value the staff who work with them, and those who provide the courses which the staff need. Not least important, we fail to provide the guaranteed funding that would enable parents and people in generally low-paid employment to take up courses; and we lose human resources we could well use. In this regard, we have already pioneered Open University courses for those working with people with learning disabilities and for those with learning disabilities themselves and we are working towards shared courses. But all that costs money.

Where staff are concerned, and not least those who as graduates with practical experience can help lead in creating good quality learning disability services, I want to draw attention to the degree courses at King Alfred's College, Winchester, and Stockport College. These are new initiatives which build on the diplomas and certificates of earlier years and recognise that community care is not a cheap and amateur alternative to the old institutions, but a dedicated professional service working alongside, supporting and encouraging the relatives, friends and neighbours who also need to be involved. The courses I have in mind are those which enable people who have already worked with people with learning disabilities to reflect on that experience, and build on it. The starting point might be at least 500 hours of hands-on experience. This means that people such as parents of men and women with learning disability are good candidates.

The ground covered in courses includes such areas as service principles, advocacy, rights, evaluation and the management of change. We are perhaps at the most significant turning point in learning disability services, and the most crucial time for determining for good or ill the future welfare of people with learning disabilities. Your Lordships may be aware that the future of the largest single professional group in the learning disabilities field—nurses—is currently under review. Whatever the decisions taken on this issue, I have no doubt that the quality and direction of change are going to be influenced enormously by the quality of professional education and training.

The Stockport and Winchester courses, side by side with the existing university degree courses, the Open University courses for a wider group (including informal carers), and the national vocational qualifications route towards professional status, are all vital parts of the work being done to ensure that there is an adequate investment in the future of services.

The funding of courses and placements in learning disability studies is not something for which we can rely on commercial sponsorship by businesses wishing to benefit from them. Service training budgets tend not to stretch to degree courses; and we should not rely on people working their passage when the salaries the far side of that are not enormous by commercial standards. I hope that we can look to government to regard favourably the financing of study for full-time courses which will help us to get and stay in the forefront of service development, and to the rewriting of Open University courses which will help a wider range of formal and informal carers give of their best.

When I look at some of the good things happening and meet some of the good people doing them, I see every possibility of a "brave new world". But I also recall that this familiar phrase comes from The Tempest, and that in the same play there is a sad line about the insubstantial fabric of our vision vanishing. We have the choice: to convert perfectly rational dreams into reality or to be content with second best. Graduates from Stockport and Winchester will know how to convert dreams into reality. They, and many others, are ready, willing and able, and they deserve our support.

4.35 p.m.

Lord Selsdon

My Lords, it is said again and again, as we review our relatively poor economic performance in the world over most of our lives, that the one thing we can always rely upon is the strength of our institutions. High among those institutions must inevitably come our academic institutions. One institution that may have declined in relative performance in the world is government, which we always used to feel was standing fair square behind our academic institutions. But these institutions and our universities are crumbling and decaying. The older they are, the greater the level of capital expenditure which is required to keep them alive. The older they are, often the better their reputation, and that reputation needs support.

For example, I understand that a university with about 15,000 students may face a capital expenditure bill of around £60 million or £4,000 a student. Why is that the case? Part of the problem is the regulations which require higher and higher standards of pollution control, fire protection and safety. Inspectors are sent in, ever mindful of the dangers of being sued and of personal liability, and make recommendations way in excess of what common logic and sense would dictate. Perhaps my noble friend will look at these issues and take into account the splendid philosophy of not entailing excessive costs and seeing whether some concession might be made to permit universities to use some of their savings for new capital investment programmes.

Education is an asset. It has a value. And learning has a value. In order to enhance this value investment in capital expenditure and increased revenues are desirable. At this particular time, for whatever reason, a perfect opportunity emerges, one where the Government are saying, "Here is the right moment to invest for economic upturn". There has never been a situation so favourable for investment in academic institutions and all the paraphernalia to support students. Land costs are lower in real terms than ever before. Building costs are lower—there is a demand for building—and unemployment is higher.

The demand for further education is as great as ever —not only in this country but also internationally—and the ability of the private sector to work with the academic institutions with the support of government to fund developments is very real. I should like to suggest to my noble friend that she might give thought to that because there are private sector organisations willing to work with universities to create developments and to provide such things as student accommodation. At a time when we are told that no new office development, no new housing development and no new apartment development can be economically viable, student accommodation can, because it has reliable tenants. I understand that it is possible to create a unit for a student of around 130 square feet for as little as £10,000, down to the last knife, cup and saucer, and yet students who have no accommodation near their faculty buildings are forced to pay high rents of £50 or more per week. I suggest that the Government look closely at this area because there are considerable opportunities at this time.

The third area I come to is the old chestnut of paying for education. There are people, students and others, who would support the principle that those who cannot afford to pay should have it for free and that those who can afford to pay should have something. I understand that the cost of an undergraduate or postgraduate may be between £6,000 and £13,000 a year, depending on the technological scale of the topic he is studying. I understand too that many countries around the world place great value on United Kingdom education. Let us have not so many civil servants or academics; let us have, some common, practical sense. I recall that Johnson, at the opening of Drury Lane, referring to Shakespeare, said: When learning's triumph o'er her barb'rous foes". Let us have a little common sense and logic.

4.40 p.m.

Lord Eatwell

My Lords, I wish to address an issue which has been referred to by my noble friends Lady David and Lady Platt and which is of vital importance to the economic efficiency of the investment in education; namely, the systematic bias which the Government operate against some of the poorest but most committed students in Britain—those who study part-time. Part-time students are people who, while typically holding down a full-time job, and often running a family too, nonetheless find the time, the energy and the enthusiasm to pursue degree courses. In doing so they demonstrate remarkable qualities of drive and dedication to self-improvement.

In the current economic climate we are all aware that resources are scarce and it is vital that we use our limited resources to greatest effect. The distinguished economist, Professor Robin Marris, has studied the comparative costs to the economy of full-time and part-time degree courses. Taking into account wastage rates and the true economic cost of full-time students, Professor Marris found that the rate of return on investment in part-time degrees was three times higher than investment in full-time degrees. I shall be grateful if in her reply the Minister will give the Department of Education's current estimates of the comparative costs of part-time and full-time degrees—and yet, despite that higher rate of return, the Department of Education persists in penalising students who take up part-time education.

First, unlike full-time students, part-time students are not eligible for the mandatory means-tested maintenance grants. Secondly, part-time students are not eligible for the student loan scheme. It seems quite bizarre that the Government are willing to make loans on advantageous terms to students whose earning capacity is hypothetical but are unwilling to make loans to students who are in work to help them cover the costs of their courses. Thirdly, part-time students are the only British undergraduates who are forced to pay tuition fees themselves. The average first degree course will cost the student £2,000 in fees. And let us remember that these are students who are receiving no help with their maintenance, no help with the purchase of books and no help with their travel expenses to get to their lectures; and on top of that they must pay tuition fees out of taxed income. I shall be grateful if the Minister will explain that extraordinary anomaly.

Why, for example, should a 30 year-old single mother, working as a laboratory assistant, who is now in the second year of a BSc course in chemistry, have to pay fees? Why should a 30 year-old, producing first-class work in a French degree course and paying her way by temping, have to pay fees? Why should a 24 year-old shop assistant, who is in his first year of a degree in mathematics, statistics and computing, have to pay fees? Why should they pay fees when younger students, on identical full-time courses, pay no fees?

Instead of encouraging investment in education the Government penalise those who are willing to make the greatest personal commitment, sacrificing leisure and time with their families and covering their own maintenance. I am sure that in her reply the Minister will not claim credit for the growing numbers in part-time education, for she must know that those numbers are growing in spite of her department's efforts, not because of them.

Instead, I shall be grateful if the Minister will tell the House the department's current estimate of the number of students who are discouraged from taking up part-time degree courses because fees are charged. Will she also tell the House whether the department has studied the impact of the cost of part-time courses on the drop-out rate from those courses, since any drop-out imposes a net economic loss not only on the individual but on the national economy too?

I welcome the fact that her department has decided that the slow-down in the expansion of full-time numbers should not apply to part-time places. However, is the Minister aware that the HEFCE has just allocated £180 million in tuition compensation to full-time places, with only, by my estimate, a miserable £10 million to support part-time places?

Finally, will the Minister now commit herself to a full study of the costs and benefits of part-time degree courses so that investment choices may in future be made on a more rational basis? On the one hand, it is not surprising that a Government who believe that the waste of skills and talents of more than 3 million unemployed is a price well worth paying should produce an education policy which is so clearly economically inefficient; on the other hand, it is difficult to understand why the Government are unwilling to make a commitment to an investment in which the rate of return is so high—the investment in part-time students.

4.45 p.m.

Lord Moyne

My Lords, I am conscious of a great boldness in addressing the House as a part of this excellent and very instructive debate with my own exiguous qualification of a second-class degree at Oxford. But I believe that we should get back to the original Motion as proposed. We are talking about people from low-income families going to university. It seems to me important to devote a minute or two to considering what people from low-income families should go to university. The noble Lord, Lord Walton, spoke of the 15 per cent. who are the top most clever people in the country and then of the 25 per cent. who come under those.

I have little sympathy for the idea that people from the next 25 per cent. should necessarily go to university. In fact, I believe that it should be the cleverest people, whatever level of income they come from. Nobody should go to university because he is from a humble background or from any other background; he should go because he is clever. It has been proved over the years that the best way to select people from all levels is by examination.

I have found an interesting quotation in a magazine called the New Socialist from two years ago in which it is said: Every child should have the chance to have an education equal to that in the best school". In the strict sense that is a circular argument because it is saying that the worst school should equal the best, and there will always be differences between schools. But one sees what the writer is getting at—that is to say, that as far as possible there should be a level playing field.

From the time of the Butler Education Act until the 1960s I believe that there was, roughly speaking, a level playing field. No playing field is ever more than roughly level, but it was so because the state education system then provided the same system and the same criteria for education as the private sector. True as it always was that from a low-income family one was less likely to go to university, nevertheless, there was the chance. It was regular and it was always present. If someone from a state school was really clever he could compete on equal terms.

Unfortunately, it appears that the educational ethos that existed then in the state sector has more or less collapsed. Noble Lords will no doubt have received, as I did, a briefing from the National Union of Students for this debate. There are some interesting things in the briefing. The author could not spell the word "inaugurate".

Unfortunately, with the way the state sector has developed under the trendy educationists in the education department, it is not possible to select people from there on examination grounds. Therefore, I join with noble Lords opposite in believing that examination can no longer be the criterion, and will no longer be able to be the criterion, until there has been a radical reform of the state education system and a return to the good academic standards that existed before. Academic teaching must return to the state system and then we shall get the right people from low-income backgrounds and, I hope, the right people from all backgrounds.

4.50 p.m.

Lord Cocks of Hartcliffe

My Lords, I am grateful to the noble Baroness, Lady Park of Monmouth, for initiating this debate because it has enabled us to put very firmly on the record the disproportion in the number of students from the working class going into higher education. She said that something like two-thirds of university students are from social classes 1 and 2. Those figures are disgraceful, and it is useful to have them on the record now because in years to come they will acquire a veneer of respectability as the former polytechnic students graduate and the figures are diluted.

Soon after I was elected to another place in the early 1970s I was asked to speak to my local chamber of commerce and to discuss youth unemployment with its members. I spoke to them for a little while and we had a chat. At the end I said to them, "You are worried about youth unemployment, but what you are really worried about is that if a lot of young people are out of work there will be social unrest leading to instability". They admitted that that was a great deal of their concern.

During the last election I heard a radio phone-in programme in which the right honourable Kenneth Clarke was answering questions. He said one thing that I have thought about ever since. He asked why a lorry driver should pay tax so that somebody could be trained to be a solicitor. I am sure that if someone ran a Fabian summer school or held a teach-in, one could provide a perfectly satisfactory answer to that question; but to a working chap who is fed up, having just finished his shift, an easy answer does not immediately spring to mind. I think that the educational establishment has got the wind up because it has been rumbled.

The noble Baroness, Lady Park, said that where there is no cultural tradition of doing so students from poor families are not entering higher education. We all know that students tend to be the children of people who have graduated. That whole ethos is part of a society in which the skills of numeracy and literacy are given far too much prominence. In fact, I sometimes used to think that the whole of our education system was geared to producing a handful of people to go to Oxford or Cambridge.

There are other skills of which there is no family tradition but for which the working class shows an equal, if not better, aptitude than other classes. I spoke in a previous debate about the way in which children can now master video machines and computers whereas a number of Members of your Lordships' House would be totally at sea with them. Let us take another modern skill of which there is no family tradition such as driving a car. No insurance policy is weighted against somebody because they happen to come from a particular social class. I sometimes wonder just how some professors of moral theology would manage to back an articulated lorry into a space where there is about a foot of clearance on either side. We are talking about particular skills only.

Some time ago I wearied your Lordships with an example from my early work in another place. The local Labour council in Bristol decided to abolish free places in direct-grant grammar schools, and there was an uproar. It was said that Labour was taking away from working-class children the opportunity to go to direct-grant grammar schools. I got so fed up with this that I got the figures from the education authority. Over a five-year period, 92 primary schools in Bristol were eligible to enter children for free places at direct-grant grammar schools. I found that 56 per cent. of those places went to five primary schools. Some noble Lords know Bristol, so when I say that those five schools included Westbury, Westbury Park and Stoke Bishop, they will know that working-class children did not even have a look in. The other 87 primary schools took up fewer than half of the free places available, yet that was the great opportunity for working-class children. It is nonsense.

The education establishment must examine itself seriously. I do not think that it is any coincidence that over half the speakers listed for this debate have been to either Oxford or Cambridge. What a pressure group to have operating on one's behalf. I do not make a party point here. I remember when my noble friend the Member for Chesterfield (I mean my right honourable friend—that was a Freudian slip) was chairman of the Labour Party's home policy committee. More people from Oxford than from Wales and more people from Cambridge than from the entire area of Scotland were co-opted onto its committees.

This debate is really an easing of the conscience on the part of the establishment. It is time that we woke up to what has been going on and to the way in which our working-class children have been treated. It is no good blaming the Government. The academic establishment must look at itself.

4.55 p.m.

Earl Russell

My Lords, I should like to congratulate the noble Baroness, Lady Park of Monmouth, on her persistence in trying to get this debate onto the Order Paper. I am delighted that she has succeeded. I am delighted also that she has drawn attention to the problems of students from low-income families. It is my contention that those students are at a disadvantage not only in terms of entry into universities but also in terms of their chances of getting a good degree when they get there.

When I contemplate a little wearily waiting for a reply to another education debate, I remember a story—I assure your Lordships that it is not apocryphal—about a debate that took place in Durban about 100 years ago on the question of whether the earth was flat. The speaker for the Flat Earth Society was its chairman, equipped with a large staff and deploying masses of figures to prove that in spite of all the appearances to the contrary the earth really was flat. The speaker on the other side was a sea captain whose only argument was that he knew that the earth was round because he had sailed around it. When the votes of the audience came to be counted, there was an overwhelming majority for the proposition that the earth was flat. But that did not actually make the earth flat.

Today we have had a veritable fleet of sea captains, with the noble Baroness, Lady Park, in the capacity of admiral. On 17th February we had an equal fleet of sea captains, with my noble friend Lord Addington in the capacity of admiral. Despite the unanimous agreement from everyone who knew about it that there was a real problem, we heard the Government reply that the system was working well. I should like to know how they know. What gives them the authority to state that everybody with any practical experience of the subject is wrong? What entitles them to dismiss experience? It begins to look as if it is becoming an item of government policy to say, "They're all out of step but our Johnny". The Government seem to rely on figures. It is of course possible that all the practical experience is wrong and that the figures are right, but it is not, I think, inherently probable. I should have thought that if all of us collectively have got it wrong that would indicate a change in the public mood so great that it ought to worry the Government a great deal more than if we were right.

I also wonder whether the party of Disraeli is altogether wise to take it as axiomatic that the statistics are right and the experience is wrong. The Government's statistics are also vitiated by the Rayner principle that they should collect statistics only of what they want to know. Of course, the Government do not usually want to know any inconvenient things, so the Rayner principle in government statistics has become a Pangloss' charter.

On 17th February, the Minister relied on the argument that many students had not taken up loans. As the noble Baroness, Lady Perry, explained, that is because many of them prefer to take jobs, but the Government do not know anything about students taking jobs. They do not want to know. So they do not have the information, and they cannot assess it.

The Minister has taken a relaxed attitude towards students taking jobs. She said that they are free to take jobs if they wish to do so. Prima facie, the Minister is in error, because some 20 per cent. of universities have rules that students should not take jobs. What is compatible with an academic education is a matter of academic judgment, not to be undertaken by the ministry. Before the Minister starts to consider overruling powers exercised under statutes and charters, she might take legal advice on the judgment of the noble and learned Lord, Lord Bingham, the Master of the Rolls, in the case of Regina v. The Disciplinary Committee of the Jockey Club on 20th December last. The Minister also said that the comparison with income support was invalid because students were expected to contribute to the cost of their own support. Was she talking just about the loan, or was she admitting that the basic level of student support is inadequate?

5.1 p.m.

Lord Judd

My Lords, those of us who know the noble Baroness, Lady Park, are aware that the debate is no fleeting interest. In her commitment to higher education and to her students as people, not just as statistics, her record is outstanding. What she and others have said today provides good examples of mature political reflection at its best.

Higher education is critically relevant to democracy. It enhances the capacity of citizens to contribute constructively and analytically to debate. We need rich resources of experience and wisdom if good political, economic and social judgments are to be made. Our future prosperity depends upon the added value of our economic life. That requires the maximum development of talent and accessibility of education at all levels throughout life.

It is difficult to exaggerate the damage to efficiency that violent stop-go policies inflict upon dedicated teachers and administrators. The latest sudden stop last autumn, with the draconian 30 per cent. cut in money paid to universities for classroom-based teaching, mainly arts and social sciences, played havoc when applications for entry in October 1993 were already rising sharply and arrangements to meet that were advanced. A consequential special victim has been the much respected Goldsmiths' College in London.

Perhaps the Minister could explain that policy of increasing starvation of the arts in higher education. I hope that she realises that there are real fears lest Huxley's Brave New World is being moved to the non-fiction shelves. The cuts have also meant that the franchising of the initial stages of higher education courses to local further education institutions has become much less feasible. There is likely to be a reduction—in some areas a total loss—of access to foundation courses as introductions to higher education. Yet those are exactly the courses which open up higher education to lower income families and ethnic minorities which, for financial, personal and cultural reasons, are less likely to be able to travel.

Expansion means greater numbers; improved access however means opening up the opportunities to a wider cross-section of society. That does not mean changed admission standards, but the removal of deterrent barriers. Those include inadequate or inappropriately drafted information to prospective students; too much emphasis on A-levels as the route to higher education; the academic/vocational divide resulting from tests at 14; and the lack of adequate financial support arrangements.

The loan system is clearly a major deterrent to potential students from poor families. The financial difficulties faced by students discourage those with few family resources behind them. The findings of the recent survey by the CVCP are significant: drop-out rates have increased disturbingly; there is growing pressure on the totally misnamed access funds—hardship funds for students who have already gained access—with a falling percentage of successful applicants and diminishing amounts awarded; 6 per cent. of students are in debt to their university, quite apart from large numbers in debt to their banks or to the loan scheme.

Despite the Prime Minister's romantic notion of a classless society, as we have heard today the stark reality is that the manual working class represents 57 per cent. of the population but provides only 25 per cent. of the higher education students. Those statistics are a challenge to us all.

Postgraduates are a special national asset. It is sadly short sighted to question spending on basic research because of the lack of a direct link between that and wealth creation. Furthermore, the many successful postgraduate students of today are the higher education teachers of tomorrow. Higher education is possible only if there are teachers. I gather that the Universities' Statistical Record calculates that the number of academic staff aged 35 to 54 increased from 58 per cent. to 70 per cent. in the 1980s, while those under 35 fell from 29 per cent. to 15 per cent. over the same period. Will the Minister assure us that that danger signal has registered and inform us what remedial action she plans to take?

As the debate has made clear, there is widespread recognition that the UK's strategic future into the next century is very much dependent upon an imaginative, viable and widely accessible system of higher education. Brandon Gough, chairman of Coopers and Lybrand, and chairman designate of the Higher Education Funding Council, has already opened the debate on how that might be funded, with his initial ideas on how employers, as well as students, might play their part.

The CVCP is clear about immediate needs: for access funds to be increased in line with expanding student numbers rather than the rate of inflation; reinstatement of the cost-effective housing benefit; a full review of all student support, including postgraduates and part-time students. We also need to ask why a college like Birkbeck, with its unique role in access, has been penalised in the recent funding allocations for the year ahead, and why the LSE, of which I am proud to be a governor, with its outstanding research grading, should have been similarly penalised when it is devoted to qualitative viability as distinct from the quantitative hardware of the United Kingdom. We should look at President Clinton's imaginative scheme for at least some students to finance their higher education by national social service; and we must evaluate the graduate tax schemes, as operated elsewhere, with repayment linked through subsequent income.

The Minister is jealous of her reputation for action. Here is an opportunity to build a national consensus on urgent measures: the desire for that has been well demonstrated today across the House as a whole.

5.7 p.m.

The Minister of State, Department for Education (Baroness Blatch)

My Lords, I too am grateful to my noble friend Lady Park of Monmouth for allowing us to return to the subject of higher education. This is the third time in just a month that we have addressed this subject. I do not suggest by that that the subject is not important nor that the anxieties expressed by noble Lords are any the less important. What I am saying is that it will be impossible for me not to repeat what I have said in the Chamber and in letters to noble Lords following previous debates.

Today's Motion has focused on participation by students from low-income families and on postgraduate students. Particular concerns have been expressed about the adequacy of support for those students and for part-time students. Let me start by saying something about participation by those groups in recent years, for there is no evidence that, overall, lack of support has deterred participation.

Contrary to what the noble Lord, Lord Judd, has just said, more students from lower income families are participating in higher education than ever before. The number of students entering universities from low-income groups has increased by 32 per cent. since 1979.

The growth in part-time and postgraduate students has been even more dramatic. The number of part-time undergraduate students has increased by 65 per cent. since 1979. The total number of postgraduate students has risen by 108 per cent. over the same period. The number of part-time postgraduate students has increased by nearly 300 per cent.

Some noble Lords do not agree with me, but I believe our arrangements for the financial support of students have contributed to the widening of access for young people to higher education.

The great strength of the current arrangements is their flexibility to meet individual circumstances. First, there is the means-tested grant, with a range of supplementary allowances, for those with additional needs. Those include disabled students, students with dependants, and mature students. Some students in vulnerable groups have retained their eligibility for benefits.

We have made access funds available for the minority of students in particular financial difficulty. It is true to say that per head of students disproportionate access funds are made available to postgraduate students. Some are anxious about the way in which the funds have sometimes been distributed. My noble friend Lady Young mentioned that. I deplore examples of bad practice as much as anyone else. The funds are an important part of the system. They are intended to target help where it is most needed and the Government look to universities and colleges to ensure that that intention is met. But we will not go on tolerating the laggedness of local authorities to make available grants to students when they qualify. I know that when students take up their courses that is a sensitive time of year.

We are not deaf to criticism. Clearly is it important to know how, where and to what extent particular needs, even hardship, occur and are met. We need to test our support arrangements against students' needs and circumstances across the country. My department is currently undertaking a survey of students' income and expenditure. We shall look carefully at the findings later in the year. I take exception to what was said by the noble Earl, Lord Russell; that we research only those issues about which we want to know. We want to know the mismatch between the funds made available to students and the degree to which they provide for their needs while they are at university. That is what we shall look for in the research now taking place.

I turn to postgraduate students: the second theme of the debate. It is not the Government's policy that every student accepted for a postgraduate course should receive support from public funds. That must be so if public expenditure is to be kept under control and the burden on taxpayers is to remain reasonable. The main channels of public funding are the five research councils to students in the physical and social sciences, the British Academy to students in the humanities and the Department for Education and the other education departments in respect of a variety of subjects, including art and design. In addition, local education authorities may make discretionary awards. The Department of Employment funds some 2,500 postgraduates each year under its High Technology National Training Programme. There is also considerable support for students from business and commerce.

The number and levels of award are set by each award-making body based on its judgment of the future need for researchers or others trained to postgraduate level within their field. The research councils, for example, offer different levels of award according to their perceptions of recruitment needs in different fields.

Anxiety has been expressed about whether there will continue to be enough students coming through to the highest levels to meet the future needs for highly qualified people, in particular for university staff. Here, all the signs are good. The number of full-time university postgraduates has increased by more than 60 per cent. since 1980. Demand for postgraduate awards is very high with steep competition for most awards. The award-making bodies keep under review the likely future demand and supply so as to ensure that we produce enough students educated to the highest levels to meet all our future needs. The grants which are given by the research councils are not awarded on the basis of means for students; they relate to their qualification to study.

It is true that postgraduate students receive less than their peers who have chosen to enter employment. But postgraduate awards are not intended to equate to salaries; they are treated as scholarships and are tax free. Older students and those with additional responsibilities may receive additional allowances. Thus, although the minimum award from the largest award-making body—the Science and Engineering Research Council—was £4,450 for a student outside London, on average students also received an additional £1,000 in allowances. Students in London received a further £1,000. Many postgraduate research students supplement their awards with earnings from part-time teaching, gaining valuable experience in the process. Others receive top-up sponsorship from companies which have an interest in their area of research. That diversity of funding is welcome.

Perhaps I may now address some of the points made in the debate. My noble friend Lady Park referred to the privatisation of the British Technology Group. The group has a strong remit to develop discoveries made in our higher education institutions and the CVCP is represented on its governing body. My noble friend referred also to the stop-go policy, as did my noble friend Lady Young. My noble friend Lady Park called us to task for the decision for a pause in the growth of higher education. The universities and colleges have performed spectacularly in expanding higher education. More than 28 per cent. of young people are now participating. My right honourable friend's decision to maintain that level reflected views expressed to him by some vice-chancellors who welcomed the opportunity to take a breath.

My noble friend also referred to the humanities being at risk, as did other noble Lords. It was said that the recent announcement of a reduction in tuition fees for classroom-based subjects would damage the humanities. That is to misunderstand the position. Tuition fees constitute only a part of public funding for higher education. The greater part comes from the funding councils through block grant, which has been increased to provide full compensation for the adjustment in fee levels. The reduction in fees for classroom-based courses will affect only recruitment in excess of planned numbers. I can assure my noble friend and others who expressed the anxiety that we have no intention of damaging the humanities.

My noble friend referred to the length of the degree course. It is not the Government's policy to reduce the length of the degree course. Our policy is that the average length of course should not increase. That can be achieved partly by an increase in the number of diploma courses for those not suited to the full degree. The inescapable fact is that, within the public funds available, the shorter the average length of course the more students can benefit from higher education.

I was interested in my noble friend's suggestion that capital grants should be made for libraries and study space. A committee chaired by Professor Sir Brian Follett is currently looking at all aspects of library provision in higher education. I am sure that the committee will also look at that possibility before reporting to the Higher Education Funding Council. Reference was also made by my noble friend to reviewing the postgraduate situation. The research councils have machinery which keeps levels of their postgraduate awards under review. Maintenance grants are revised each year. However, as regards scientific manpower, including postgraduate studies, the situation will be reviewed in the forthcoming White Paper on science and technology. I have no doubt that we will give considerable time to debating that.

The noble Lord, Lord Morris of Castle Morris, referred to falling academic standards. I do not know why the noble Lord claimed that the standard of the British degree is falling. The fact is that the proportion of first-class and upper second-class degrees awarded increased steadily throughout the 1980s. My noble friend Lady Young referred to the cost to higher education institutions of administering the loan scheme. Higher education institutions certify students' eligibility for loans. They are awarded £4 for each correctly completed certificate. It is our view that that should meet the costs of an efficient institution, bearing in mind the increasing level of take-up.

The noble Lord, Lord Annan, referred to the research assessment exercise as being too costly and too onerous. Assessment is essential to enable research funding to be targeted on departments which provide the highest quality. The Higher Education Funding Council's research assessment exercise was not an exercise in number crunching; it involved subjective judgments by academics of their peers. The council will consider its approach to the next exercise in the light of information from institutions on costs. The funding council is considering the need to take steps to ensure that administrative burdens are kept to a necessary minimum.

My noble friend Lady Perry was worried about students being intimidated by the thought of long-term debt. I admit that we have much work to do in that respect. The loan which is made available to young people is reasonable. It does not begin to qualify for repayment until the April following the end of the course. There is no requirement on the part of any postgraduate to repay the loan until he or she is earning at or above £13,560, which is 85 per cent. of the national average wage at present. That is index rated every year. If a graduate does not reach that level of income for 25 years or reaches the age of 50 during the time that the grant repayment has been deferred, whichever comes first, the loan is written off. That is not onerous but I accept that we still have a long way to go to make sure that young people find it preferable to take the loans on more generous terms than borrowing from banks or building societies.

My noble friend Lady Perry mentioned a graduate tax. I know that she suggested that a graduate tax would enable student numbers to expand faster. However, under the present arrangements the Government remain committed to expansion of higher education. As my noble friend Lady Young pointed out, entrants to higher education have risen from one-in-eight in 1979 to one-in-four now, and that will reach one-in-three by the end of the decade.

My noble friend said that replacing loans by a graduate tax would be an easier way to pay. That is fraught with difficulties which have been well discussed. I shall take back what my noble friend said to my right honourable friend. However, the difficulty about a graduate tax is that it would not distinguish between those graduates who receive public support from their higher education institution and those who do not. A system that did distinguish in that way would be administratively complex. On the other hand, a loan relates only to those young people who make use of the facility and it gives the student a choice of how much to borrow. Indeed, I omitted to say earlier that the repayment may be over five years or even longer if it is related to a longer course.

My noble friend Lord Beloff referred to the HEFC being run by accountants. That is not true. The council carries out much of its business in close co-operation with universities and colleges. Indeed, its chief executive is a former vice-chancellor. Its new chairman has had a close association with the City University and has been a member of the Council for Industry and Higher Education since 1985.

My noble friend Lord Boyd-Carpenter said that loans will not save public expenditure. I am reliably informed that in due course it is expected to make considerable savings for the taxpayer. I understand that those savings should reach over £200 million per year.

Lord Boyd-Carpenter

My Lords, perhaps my noble friend will forgive me. I did not say that it would eliminate public expenditure. I said that there would be no early relief to public expenditure. Surely that is the case?

Baroness Blatch

My Lords, my noble friend is absolutely right. However, there will be savings when the scheme comes to full fruition.

My noble friend Lady Perry claimed that we are reverting to a system of central planning. I do not believe that that is the case. The funding system is essentially the same as it was before the adjustment in tuition fees. The decision on who to recruit and in what subjects still rests with the universities. We value the autonomy of institutions and their academic freedom. I agree with my noble friend Lady Perry that we should nurture the market place which we have created.

My noble friend Lord Chilver asked us to encourage the universities to be more flexible in their entry requirements. Under legislation passed in this House, universities are entirely free to determine their own entry requirements. Many, particularly the new universities, are already showing that flexibility. However, the new GNVQ, to which many noble Lords have referred, will provide a vocational route for entry into higher education which is an alternative to the traditional A-Level route. However, I join with the noble Lord, Lord Cocks, in saying that it must be for the universities to consider the possibility of wider access to their institutions.

My noble friend Lady Platt referred to women's participation. That is an important point to be made. She has expressed concern about the proportion of women in higher education. We have now achieved parity in the student population. The proportion of women full-time students rose from 41 per cent. in 1979 to 48 per cent. in 1991. We cannot change the position among academic staff overnight, as my noble friend will realise. However, I believe that as the present generation of students provides the next generation of academic staff, we shall achieve better representation of women at all levels in higher education.

My noble friend Lady Platt referred also to mature students. For the second year in succession in 1991 more mature students than young students began higher education courses at both undergraduate and postgraduate level. The proportion of mature undergraduate students increased from 43 per cent. in 1979 to 49 per cent. in 1991.

The noble Baroness, Lady Lockwood, was concerned about declining funds for higher education. More funds than ever before are being provided through funding council grants and tuition fees. The funds for 1993–94 are 7 per cent. up on the previous year after increases of 10 per cent. in each of the previous three years. That is generous, especially given the present pressures on public spending.

The noble Lord, Lord Eatwell, was concerned about part-time students and said that funding is inadequate. Demand for part-time higher education study is buoyant. Part-time students can apply for discretionary grants. They may also qualify for social security benefits although many are in employment and can support themselves. I cannot give the specific figures for which the noble Lord asked but I shall write to him.

Lord Eatwell

My Lords—

Baroness Blatch

My Lords, I am sorry that I cannot give way but I have no time. This is an almost impossible task. I am trying to reply to a debate which has had many speakers and I am trying to cover all the points raised.

My noble friend Lord Selsdon referred to capital funding for universities. He said that universities and colleges should look to private sources to meet some of their needs. That is already happening. Many universities have been expanding their sources of private funds for many years. We believe that that will continue. In addition, we have recently relaxed the controls on private borrowing by colleges and universities. For the first time they are able to use exchequer-funded assets as security when raising loans.

The noble Lord, Lord Judd, said that he wanted better information. The Government's Higher Education Charter will encourage universities to improve the information made available to students.

I hope that your Lordships will forgive me if I stress the positive aspects of our higher education system. Record numbers of students are being educated in our universities and colleges. The number of home students has increased by over 80 per cent. since 1979 and they are achieving better results than ever before. We have more students in this country successfully completing their higher education courses than any other country. Our system of student support remains one of the most generous in Europe. Of course, a minority of students suffer hardship, I do not deny that. However, the virtue of our system is its flexibility to respond to the range of different needs. Access funds in particular can and should be used specifically to respond to individual needs. The combined grant and loan system provides a firm and fair foundation for our students to undertake study. Full year support from grant and loan is nearly 40 per cent. higher than grant alone three years ago.

We could never undertake to provide financial support for everyone who chooses to take a postgraduate course. However, government funds are available from research councils and other sources. In 1991–92 the number of awards was the second highest ever. As I said, those awards are not given on a means-tested basis. I thank my noble friend Lady Park for giving us the opportunity to return to this extremely important subject.

5.26 p.m.

Baroness Park of Monmouth

My Lords, I am grateful to the Minister for the care she has taken in the reply to the debate. I did not expect any immediate commitments and I was not disappointed. I am especially happy and grateful that so many noble Lords made such valuable and lively contributions to a worthwhile debate. I thank the CVCP to which I am indebted for the useful survey it conducted among universities and for its unfailing readiness to provide facts and figures. I thank the other bodies who sent me useful information.

I should like to make two brief points.

The Deputy Speaker (Lord Strabolgi)

My Lords, I am sorry to interrupt the noble Baroness, but the time allotted for this debated has now elapsed. Does the noble Baroness wish to withdraw the Motion?

Baroness Park of Monmouth

My Lords, I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.

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